03-02-2021, 11:00 AM
This is a fantastic topic and I'm so glad I found it, because I was going to start a similar thread before I decided to do a search.
There's a healthy discussion here about the danger of drawing from your growth portfolio, due to down years, but it seems to me there's an equal concern about dividends that get cut. We've seen BP and Dominion cut their dividends in recent years. I'd hate to see someone get that minimum $1,125,000, retire, average out to 4%, but then have certain key stocks cut their dividend rates and the average falls to 3%. I guess that would force you into the hybrid approach described where you get the dividends you can, and supplement with liquidating principal to supply the rest. (To be honest, I think you'd want double that - $2.5 million - at age 60 to feel confident that you can retire and weather future financial storms. Also the 4% dividend is taxed, and the $50,000 expenses are presumably after-tax, so even without financial storms $1.125 million is too low, though I realize Kerim was just proving a point not trying to showcase an example nest egg amount.)
Also ...
"The stocks I hold have consistently provided an increase in the dividends paid and I am currently receiving over $60,000 annually." - wow! And that was back in 2014. Cannew if you're still around I'd love to know how much you are receiving now. That's the highest total I've seen someone mention here so far.
There's a healthy discussion here about the danger of drawing from your growth portfolio, due to down years, but it seems to me there's an equal concern about dividends that get cut. We've seen BP and Dominion cut their dividends in recent years. I'd hate to see someone get that minimum $1,125,000, retire, average out to 4%, but then have certain key stocks cut their dividend rates and the average falls to 3%. I guess that would force you into the hybrid approach described where you get the dividends you can, and supplement with liquidating principal to supply the rest. (To be honest, I think you'd want double that - $2.5 million - at age 60 to feel confident that you can retire and weather future financial storms. Also the 4% dividend is taxed, and the $50,000 expenses are presumably after-tax, so even without financial storms $1.125 million is too low, though I realize Kerim was just proving a point not trying to showcase an example nest egg amount.)
Also ...
"The stocks I hold have consistently provided an increase in the dividends paid and I am currently receiving over $60,000 annually." - wow! And that was back in 2014. Cannew if you're still around I'd love to know how much you are receiving now. That's the highest total I've seen someone mention here so far.